President Biden just shut down a Chinese crypto miner in Wyoming—but dozens of others remain
A Chinese-owned Bitcoin miner is being kicked of its land in Wyoming following an order from President Joe Biden. The administration has given the miner and its partners 120 days to sell the land they operate on due to spying concerns, the White House said in a statement. MineOne Partners runs the mine, which is less than a mile away from Francis E. Warren Air Force Base, which stores intercontinental nuclear missiles.
“The presence of specialized and foreign-sourced equipment potentially capable of facilitating surveillance and espionage activities presents a national security risk,” the White House said. Neither MineOne Partners nor China’s U.S. embassy immediately responded to requests for comment.
MineOne bought the land in 2022 and later installed cryptocurrency mining equipment, according to the statement. At the time, the transaction was not filed with the Committee on Foreign Investment in the United States, but it was later alerted to them by a member of the public. CFIUS then deemed the purchase to have national security implications after an investigation. Last October, The New York Times reported that the tipoff had came from Microsoft, which operates a nearby data center supporting the Pentagon, cautioning that it could enable the Chinese to “pursue full-spectrum intelligence collection operations.”
The decision “highlights the critical gatekeeper role that CFIUS serves to ensure that foreign investment does not undermine our national security,” Treasury Secretary Janet Yellen said in a statement.
‘Huge slew of Bitcoin miners’
Land purchases in the U.S. from Chinese companies are “absolutely going up,” Anita Nikolich, head researcher of technology innovation at the University of Illinois, told Fortune. As a result, 33 states introduced 81 bills last year attempting to curtail foreign purchases of land, according to reporting by the Washington Post. Nikolich says the order against the Wyoming operation isn’t specifically an attack on Bitcoin miners but rather part of a bigger picture: There are “many recent indicators of adversarial activity” in critical infrastructure, and foreign purchases of land near such infrastructure, that the Biden administration “can’t ignore.”
Indeed, in February it was revealed that a Chinese hacking network known as Volt Typhoon had been dormant inside U.S. plane, train, and water infrastructure for five years, “pre-positioning” itself for future sabotage, intelligence services said in a statement. Volt Typhoon is “the defining threat of our generation,” FBI director Christopher Wray told a U.S. committee hearing soon after.
MineOne is just one of many Chinese-owned miners building data centers in Southern states and in the Midwest, where agricultural land is abundant and energy is cheap. Of that rise, “we’re seeing a huge slew of Bitcoin miners,” says Nikolich. The Times found Chinese-owned or operated miners in at least 12 states, which together use as much energy as 1.5 million homes. The flurry of purchases are a result of the Chinese Communist Party banning Bitcoin mining in 2021, upending the country’s former status as an industry leader and forcing operations overseas.
At least one of those mines, Polaris Technologies, in Muskogee, Oklahoma, may have circumvented state laws on foreign-owned land purchases. The miner last May purchased an industrial site from the State of Oklahoma, land deeds obtained by Fortune show. The company is using the land to build a $100 million data center. Polaris CEO Meng Zhang is a Chinese citizen and former employee of Bitmain, a Chinese company that produces 90% of Bitcoin mining machines and ASICs (a type of advanced semiconductor).
Some miners have been incentivized to build data centers with deals granting companies access to the grid at a discount. For instance, one Chinese-owned miner, Bison Blockchain, won cheaper-than-usual rates from the state of Wyoming and its energy subsidiary, Black Hills energy. Several companies came in to bid on the deal, which essentially said, “We will buy energy from you for a number of years, and you in turn will build a substation specifically for our data center,” Nikolich explained.
The statement also coincides with today’s announcement from Biden that he is raising tariffs on various Chinese imports, which he argues are unfairly subsidized by Beijing and undermine U.S. competitors. The imports affected include semiconductors, which could pose a hike in production costs for U.S. miners that rely on mining ASICs, 98% of which are produced by Chinese firms.
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